So you are ready to hire financial advisor. Awesome! But how much should you pay for planning services?

It amazes me how difficult the answer to this question can be to find. Most financial advisors don’t list their pricing on their website, see mine here if you are interested.

I think one reason most advisors don’t put prices on their websites is because they want to explain their value first. Another is that every client is different and they don’t know exactly what they will charge until they understand your needs.

Ok, I get it. But I think you should be able to know what you can expect to pay 90% of the time. I include a range on my site because I know that no two clients have the same needs so my prices will likely vary.

So how much does a financial advisor/planner cost?

It depends on how much help you are looking for. Let’s discuss in more detail below.

First, it is important to know what you are paying for.

In order to know what is a reasonable price to pay for financial advice, you need to decide how much advice you are looking for and who you want to implement the recommendations. The range of services offered by a financial advisor can go from a one-time meeting to all-inclusive ongoing planning. The more advice you are looking for, the greater the cost. Additionally, the more service you are looking for beyond the initial planning work, the greater the cost.

One-Time Meeting

When is this a good option?

A one-time meeting works well when you want to address one or two financial questions. Maybe you want to have your portfolio validated by a professional, discuss cash flow issues, or make sure you are optimizing your employee benefits. The one-time meeting will give you access to a certified financial planner who can provide you with objective advice.

This can also be a great option if you haven’t worked with a financial advisor before and you want to dip your toe in the water rather than diving in headfirst.

Cost

The cost tends to range from $400-$600. This typically includes an initial one to two hour meeting with the advisor and follow up from them with recommendations and actions items for you to complete.

Hourly/Flat Fee

When is this a good option?

Hourly projects or flat fee plans can be a good option when you have more than one or two questions and you are comfortable implementing the recommendations on your own. The planner does the analysis, presents recommendations, and you take it from there.

Cost

Most certified financial planners charges will be based on the project. They typically charge around $150-$300 per hour. Rates will vary depending on the advisors experience, expertise, and competition. The cost of the plan will depend on the scope of the engagement. From what I have seen, comprehensive financial plans range from $1,800-$5,000. Keep in mind if your financial situation is complex, you may pay more than the normal range.

Ongoing Comprehensive Financial Planning

When is this the best option?

Ongoing comprehensive financial planning works well for people who don’t have the time, knowledge, or desire to manage their finances. With this service, your financial advisor will guide and coach you through your financial life. Have a financial question, give your advisor a call or email, have them recommend the best course of action, and have them help you implement the recommendations. This option works well for people who want to have ongoing access to a financial planner at an affordable price.

With ongoing planning, the advisor often takes on the role of your financial quarterback and provides advice, coaching and accountability. This is truly full service and typically covers most facets of your financial life such as: estate planning, insurance analysis, investment analysis, cash flow/budgeting, employee benefits optimization, tax planning, retirement planning, and college planning.

Cost

More and more advisors are offering this type of service with a monthly retainer. Often they will charge $500-$2,000 upfront for the initial planning phase and then charge a monthly fee of $50 – $300 per month depending on the complexity of your financial needs.

Alternatively, other planners are charging a monthly fee based on a % of your gross income plus a % of your net-worth.

Investment Management

Many advisors also offer portfolio management services. For most of the advisors I know, there is a distinction between recommending asset allocations and managing portfolios.

Cost

Fees for portfolio management range from 2% to .25% depending on the amount of assets you have managed and how they are managed.  There can also be additional fees for trading costs and underlying investments.

Some advisors include comprehensive financial planning and asset management under the assets under management (AUM) fee. This is still the most common type of fee I see charged by registered investment advisors (RIAs). Many of which have investable asset minimums of $500,000 or $1,000,000 to get started. A 1% fee on $1,000,000 means you are charged $10,000 per year.

No matter which type of service you choose, make sure you understand what you are paying for so that you are clear about what you will receive. Setting clear expectations before you get started is key.

As for where to find financial advisors, XY Planning Network is a good place to find certified financial planners who are working with Gen X and Gen Y. I am a member of XY Planning Network. As a group of advisors, we are passionate about bringing financial planning, that was historically reserved for millionaires, to Gen X and Gen Y regardless of net-worth or investable assets.

You can also find qualified planners at NAPFA’s find an advisor site.